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Trickle-down Economics: End of an Era in the US

Last few months have been very tragic for the world and especially for the United States. Global trade war esp. focused on China, Iran sanctions and multitude of disrespectful tweets have become the norm now out of Washington. I have studied in China and the US, so have a very close experience with people from both these countries. Some of the best people I have met in life are Chinese and Americans. Graceful, advanced, measured and wholesome.

Anyways, I always tried to write a bit about Trickle-down economics. If you want to know a bit about American political and economic ideology which divides Republicans and Democrats, then the best place to start would be the 1980s era which implemented the so-called Trickledown  economics. The policy reduced taxes on the rich apart from disrupting social welfare programs hoping that it would stimulate entrepreneurship within the society leading to more jobs for the less privileged people in the society.

This is the greatest fallacy thrown to the world. The concentration of the wealth among the rich increased after the 1980s especially among the top 1% of the population. Moreover, Gini Coefficient, an inequality measure increased over the years. The higher the gini coefficient, the more the economic inequality among the population.

The wave of extreme capitalism broke the backbone of middle class people in the US. The government reduced spending on social sector,  among many other core humanitarian sectors. In the end, America’s greatest contribution to the world last century was the emergence of a very influential middle class and sadly this policy broke American middle class very foundations. Democrats do not believe in trickled own economics and gratefully major economies around the world rejected this idea.

Finally, trickle down economics brings forth one of the most monumental questions of all time…What is the fiduciary responsibility of the state ?

This will also be my last article on political issues in the US. I have not written much about political issues especially about the US. Trickle down economics came out during conversations with Americans in Seattle and this led me to read a bit more about this policy.

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